US-based apparel company Carter’s has reported an operating income of $93.9m in the first half (H1) of fiscal year (FY) 2023, down 47.3% from $178.0m in the same period of FY22.

The company’s operating margin declined to 7.2% from 12.0% a year ago.

Its net income was $59.9m in H1 FY23 compared to $104.9m in H2 FY22, corresponding to earnings per diluted share (EPS) of $1.59 over the period.

During the period ending 1 July 2023, Carter’s net sales were $1.30bn, down 12.5% from $1.48bn in H1 FY22.

Net sales for US Retail and US Wholesale declined 13% and 12% in H1 FY23 while sales for International business dropped 11%.

In the second quarter (Q2) of FY23, net sales of Carter’s dropped 14.3%, to $600.2m from $700.7m in the same period FY22.

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By GlobalData

The retailer’s operating income also decreased by 50.2% to $37.6m. Meanwhile, the operating margin decreased to 6.3% in Q2 FY23.

Its net income was $23.9m over the quarter against $37.0m in Q2 FY22.

Carter’s chairman and chief executive officer Michael Casey said: “We achieved our second quarter sales and earnings objectives. For the third consecutive quarter, we saw higher than planned demand in our wholesale business driven, we believe, by the strength of our product offerings and leaner inventory positions.

“Our comparable retail sales in the second quarter were in line with our forecast. Unseasonably cool weather weighed on consumer demand in the earlier months of the quarter. We saw a meaningful improvement in the trend of our retail sales beginning Memorial Day weekend, which has continued into July.”

In the third quarter of fiscal 2023, Carter’s expects net sales in the range of $770m to $790m.

For the full year of 2023, it expects $2.95bn to $3.00bn in net sales and adjusted operating income in the range of $325m to $340m.